The Federal Government has criticised former Vice President Atiku Abubakar over his proposal to restore petrol subsidy, describing the policy as fiscally unsustainable and a reversal of reforms in Nigeria’s petroleum sector.
The government said Atiku’s proposal was politically motivated and inconsistent with the realities of the country’s changing petroleum market.
Special Adviser to President Bola Tinubu on Information and Strategy, Bayo Onanuga, stated this in a statement issued on Thursday titled, “Restoring Petrol Subsidies: Atiku’s Volte-Face and Desperation for Power.”
Onanuga said Atiku had previously supported the removal of petrol subsidy but had now changed his position ahead of the 2027 general elections.
“We respect Alhaji Atiku Abubakar’s constitutional right to propose alternative policies, to seek the support of Nigerians and recant a major policy prescription,” he said.
“However, Nigerians also deserve to understand what the proposed restoration of subsidy would actually mean, how it would be funded, and whether it is compatible with the legal and structural changes that have taken place in the petroleum sector.”
According to the Federal Government, the subsidy regime was dismantled under the Petroleum Industry Act, which provided for its removal by the end of June 2023.
Onanuga argued that President Tinubu’s decision to remove the subsidy in May 2023 only accelerated an already established legal process.
He explained that subsidy was not money sitting in government coffers but the difference between the actual cost of petrol and the regulated pump price, with government absorbing the resulting loss.
He dismissed Atiku’s claim of a ₦30 trillion subsidy windfall or savings, describing the figure as non-existent.
The presidential aide also argued that Nigeria’s petroleum industry had undergone significant changes since the subsidy was removed, particularly with the emergence of domestic refining capacity.
He cited the Dangote Refinery and other local refineries as evidence that Nigeria was increasingly moving away from dependence on imported petrol.
Onanuga warned that restoring subsidy could undermine domestic refining and discourage further investment in the sector.
He said the country had moved from spending scarce foreign exchange on imported refined petroleum products towards processing crude domestically, describing the development as an opportunity for greater energy security, foreign-exchange conservation and job creation.
The government further claimed that funds previously used to subsidise petrol had increasingly become available to the three tiers of government.
According to Onanuga, the three tiers of government shared about ₦3 trillion from the Federation Account in July, describing the figure as a record.
He, however, acknowledged that the removal of subsidy had increased the cost of living and placed pressure on households and businesses.
The Federal Government said it was pursuing alternative measures to reduce energy costs, including the promotion of Compressed Natural Gas (CNG), which it said could be about 70 per cent cheaper than petrol for vehicles and commercial transportation.
“ We believe sustainable relief is different from recreating a fiscal arrangement that will again cripple our country,” Onanuga said.
He challenged Atiku and other political actors advocating subsidy restoration to explain how such a programme would be funded and implemented.
He asked whether the government would borrow to finance the policy, amend existing provisions of the Petroleum Industry Act, and establish mechanisms to prevent the abuse associated with the former subsidy regime.
Onanuga also questioned what exactly a restored subsidy would cover under the current petroleum market, given the increased domestic production of petrol.
“Political promises must be backed by fiscal arithmetic,” he said.
The Federal Government urged political actors to engage Nigerians on the cost of living and economic policy based on the current realities of the Nigerian economy rather than returning to what it described as the old petroleum model.
It also called on Atiku to provide Nigerians with the full fiscal and legal implications of his proposal to restore petrol subsidy.